Chapter 10 · ICSE Class 7 Mathematics

Simple Interest

Learn how banks and lenders calculate simple interest on money borrowed or invested over time.

🏦 Chapter 10

Calculating simple interest on a principal of 2000 rupees at 5 percent for 3 years The simple interest formula applied to a principal of 2000 rupees, a rate of 5 percent per year, over 3 years, giving an interest of 300 rupees SI = (P × R × T) ÷ 100 Principal ₹2,000 Rate 5% Time 3 years SI = (2000×5×3)÷100 = ₹300
10.1

The Simple Interest Formula

Simple Interest (SI) is calculated using SI = (P × R × T) / 100, where P is the principal (amount borrowed or invested), R is the rate of interest per year, and T is the time in years.

1

Find the simple interest on ₹5000 at 6% per year for 3 years.

SI = (5000 × 6 × 3) / 100 = ₹900

2

Find the simple interest on ₹8000 at 4% per year for 2 years.

SI = (8000 × 4 × 2) / 100 = ₹640

10.2

Finding the Total Amount

The total amount (A) to be repaid or received is the principal plus the interest: A = P + SI. This is useful for finding what someone owes or receives at the end of a loan or investment period.

1

₹6000 is invested at 5% per year for 4 years. Find the total amount at the end.

SI = (6000 × 5 × 4) / 100 = ₹1200; Amount = 6000 + 1200 = ₹7200

2

If the simple interest on ₹4000 for 2 years is ₹480, find the rate of interest.

480 = (4000 × R × 2) / 100 → R = 48000/8000 = 6%

Practice

Exercises

1. Find the simple interest on ₹3000 at 8% per year for 2 years.

2. Find the simple interest on ₹10000 at 5% per year for 3 years.

3. ₹7500 is invested at 6% per year for 2 years. Find the total amount at the end.

4. If the simple interest on ₹5000 for 3 years is ₹750, find the rate of interest.

5. A loan of ₹12000 is taken at 7% per year. Find the interest owed after 1 year.

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